Detroit Paper Says Haslam Offered VW Cash to Stop UAW at Chattanooga

A report in the Detroit News on Tuesday makes the claim that Tennessee Governor Bill Haslam offered substantial state financial incentives to Volkswagen in an effort to secure the defeat of a union-representation election at the German carmaker’s Chattanooga plant.

The financial rewards were “contingent upon ‘works council discussions between the State of Tennessee and VW being concluded to the satisfaction’ of the state,” according to the News.

A bid by the United Auto Workers to represent workers at the Chattanooga VW plant was narrowly rejected by a vote of employees in February. The union has since petitioned for a re-vote, contending that actions by ranking state officials opposing the UAW’s presence — including Haslam, U.S. Senator Bob Corker, and members of the Tennessee General Assembly — constituted unfair labor practices and tainted the election results.

The News quotes Fred Feinstein, former general counsel at the NLRB, as saying this latest revelation “could be convincing enough for the NLRB to call for a new Chattanooga labor vote.”

Much of the discussion between Volkswagen management and state officials prior to the February vote on UAW representation revolved around VW’s interest in establishing European-style “workers’ councils” at the Chattanooga plant.

In response to a variety of public statements by Haslam and Corker expressing concern over the prospect of UAW representation of plant workers at Chattanooga, a spokesman for VW had insisted that strong worker organizations actually gave Volkswagen a “competitive advantage” in the worldwide automobile market.

>The VW spokesperson, Bernd Osterloh, head of Volkswagen's works councils and a member of VW's supervisory board, also said, "Volkswagen is led by its board and not by politicians."

At various times in the run-up to the union vote, Corker and Haslam had suggested that a planned expansion of the Chattanooga VW plant to accommodate SUV production could be adversely affected by a yes vote for the UAW. Plant officials rejected such claims, asserting that decisions about the plant’s manufacturing future had nothing to do with the outcome of the union vote

At one point before the vote on UAW representation, Bo Watson (R-Hixson), speaker pro tem of the state Senate, joined what seemed to have become a quasi-official state-government campaign against the UAW, threatening legislation to revoke the existing state financial concessions granted to VW by the state if the union should win the vote.

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Victory involves apparent sweep of "battleground" states and tier of Midwestern rust-belt states that had been regarded as safely Democratic; Republicans will also keep control of both houses of Congress.